SAN JUAN – Gov. Luis G. Fortuño announced Tuesday a plan to take drastic measures to eliminate Puerto Rico’s large budget deficit, a move that includes laying off more than 30,000 public employees in the U.S. commonwealth.
The elimination of 10 percent of the government jobs on the island will be done gradually and after offering retirement incentives and other voluntary measures to reduce public expenditures by around $2 billion.
The Puerto Rican government is running a budget deficit of $3.2 billion.
In a televised announcement that was taped on Monday, Fortuño said that the number of layoffs cannot yet be determined since authorities are waiting to find out how many officials will opt for the retirement incentives.
The governor said that he will send to the Puerto Rican legislature four bills to establish control over public spending and a series of incentive plans for investments in public projects, as well as a temporary increase in taxes on company profits and affluent individuals.
He also said that tax increases would be imposed on wine, beer and cigarettes.
The governor also repeated that there will be no additional taxes on gasoline or cell phones.
“I know very well that our middle and working class cannot stand one tax more. Just like you have done, now it’s the government’s turn to adjust its lifestyle,” he said.
As an example, Fortuño announced that he will reduce his own salary by 10 percent and will freeze salary hikes for public employees, this after implementing a series of austerity measures applying to government employees including no longer issuing them cell phones or government vehicles for personal use.
“This is the time to act,” Fortuño added in his 25-minutes speech in which he emphasized that although “the government might be in bankruptcy, Puerto Rico is not because it can emerge strengthened from the crisis.”
“If we do nothing, Puerto Rico would enter into an unimaginable crisis with the risk of losing 130,000 jobs,” he said, after stating that the island is confronting its worst economic and fiscal crisis since the Great Depression and is running the risk of homes and retirement accounts losing even more value.
“But I’m not going to look backwards, but rather look forwards. It’s up to everyone to rebuild Puerto Rico,” he added.
“We have to make sacrifices that will allow us to recover prosperity,” Fortuño said elsewhere in his speech, in which he added that $5 billion will be invested in public projects on the island under President Barack Obama’s stimulus plan. EFE